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Plenty of rooms at valley�s inns Mail Tribune / Bob Pennell The Rogue Regency Inn near the north Medford interchange is adding 79 rooms. Last week, worker John Olsen of Medford helped install siding on the addition. By David Preszler A hotel building boom is adding rental rooms by the dozen in Jackson County. More than 300 new rooms in Medford and Ashland alone are either under construction or in the works. Two new hotels and expansion at three existing ones will increase the number of rooms in the county�s two largest cities nearly 10 percent. And more are on the way Expansion or new construction is either under way or planned for these hotels: Hampton Inn: Plans for a three-story, 75-room hotel on 1.65 acres off Morrow Road, roughly behind the Dairy Queen on Medford�s Biddle Road, were approved by the city this month. Holiday Inn Express: Building permits have been issued for a four-story, 65-room hotel on Clover Lane in Ashland. Rogue Regency Inn: The Medford hotel is in the midst of a 79-room expansion, scheduled to be done July 1. Hawthorn Inn & Suites: The Valley View Road hotel near Ashland is adding 18 rooms, scheduled to be open in August. Ashland Springs Hotel: The renovation of the former Mark Antony will feature 70 rooms and is scheduled to open in August. The heavy building comes with annual room occupancy rates hovering around 50 percent for the two cities, raising the question: Can the market bear so many new rooms? Part of the year, the answer seems to be yes. This holiday weekend, for instance, the Rogue Valley Cup soccer tournament will bring thousands of visitors and rooms are expected to be scarce. The same is true in Ashland during the peak of the Oregon Shakespeare Festival. But what about the rest of the year? The annual occupancy rate on the 2,063 rooms in Medford is 51-52 percent, according to the Medford Visitors and Convention Bureau. The occupancy rate for Ashland�s 1,054 rooms was 45.7 percent for the last fiscal year, based on bed tax records. Wolfgang Rood, a Seattle-based hotel consultant, says the Medford and Ashland occupancy rates are low, given Oregon�s 1999 average of 63.4 percent. "Generally under 55 percent, it�s tough to be profitable," he says. But while the market�s occupancy rates may be low, local industry leaders say rates at larger and newer hotels are higher; one estimated that they are in excess of 60 percent. Buoyed by a strong economy, steady population growth and more travel through Rogue Valley International Airport, corporate and business travel, particularly in Medford, has risen in recent years. That travel has offered hotels a less seasonal stream of guests. "We are confident we can fill those," Rogue Regency Inn co-owner Scott McCullom says of the 79 rooms scheduled to open at the Medford hotel July 1. "We cater mostly to the corporate and business traveler, the more long-term-stay customers." "The industry has done real well in the last couple of years," says Todd Thoreson, manager of Medford�s Red Lion Hotel and a leading visitors� bureau official. "Demand in the market is good and the new inventory is being built to meet that demand." Demand is driving the 18-room expansion at Hawthorn Inn & Suites north of Ashland, manager Carolyn Schwendener says. The building boom doesn�t worry her; business has been good and the hotel is adding the two-room suites that guests have requested. The Rogue Valley is far from the only place where new rooms are rapidly appearing. With the national economy thriving, the hotel industry started construction on nearly 145,000 rooms last year � a level not seen since the late 1980s. And cities have found themselves with more rooms than guests as national occupancy rates have slipped. The average occupancy rate in 1999 was 70.4 percent, down from 71.5 percent in 1998 and 72.7 percent in 1997. Rood and other industry watchers say "limited-service" hotel chains, such as Hampton Inn and Holiday Inn Express. are leading the building boom. That trend has been borne out locally. Holiday Inn Express opened a 65-room hotel in Medford last spring and permits have been issued for another one to be built in Ashland. And earlier this month, Medford city officials approved plans for a 75-room Hampton Inn to be built off Biddle Road near Dairy Queen. But mid-range hotels aren�t the only ones expanding as evidenced by the Regency�s addition and the ongoing remodel of the former Mark Antony in Ashland. The owners of those hotels believe they fill a unique place in the market that allows them to expand with confidence. Doug Neuman, the developer remodeling the Mark Antony into the 70-room Ashland Springs Hotel, isn�t too concerned about the increased competition. "We�re sort of in a different market," he says. "We�re not an economy place. This is more of an event." Industry leaders say the hotels most likely to feel the pinch if the market is indeed overbuilt are the older, independent hotels. They face stiff competition from the limited-service chains that offer newer rooms at comparable rates. "Clearly, the people investing in the (new) properties are betting that at least they will be successful," says Thoreson. And Rood says overbuilt markets in growing cities tend to be temporary situations, where the industry struggles briefly while demand catches up. Today's Edition : News | Sports | Business | Weather | Tempo | Classifieds Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA